Fact Checking The Sunday Shows - December 18, 2011

December 19, 2011 9:24 am ET

This week on the Sunday political talk shows, topics of discussion ranged far and wide. On Fox News Sunday, GOP presidential candidate Mitt Romney advocated for block granting Medicaid despite the harm that would do to those who rely on the program. On This Week, House Budget Committee Chairman Rep. Paul Ryan (R-WI) distorted the content of a CBO report on income inequality. House Speaker John Boehner (R-OH), appearing on Meet the Press, shared several false claims: that employers are concerned about "uncertainty," and that the Keystone pipeline would create 20,000 jobs. Rep. Michele Bachmann (R-MN), also on Meet the Press, did the same, falsely asserting that there's no evidence the payroll tax holiday created jobs and that Iran has threatened the U.S. and Israel with nuclear weapons.

Fox
News Sunday

CLAIM: Romney
Claimed "States Can Do A Better Job Caring For Their Own Poor" With Medicaid
Block Grants

MITT ROMNEY: Actually, the great
news about those programs is that in the Ryan plan and in the plan I've put forward,
I take a program — the biggest of those that is Medicaid, I take the Medicaid
dollars, send them back to the states without the mandates as to how they have
to treat —

CHRIS WALLACE (HOST): You're also
cutting the budget by $700 million.

ROMNEY: What I do is I take the
money and send it back to the states and say we're going to grow that funding
at inflation, the CPI, plus 1 percent. By doing, that you save an enormous
amount of money. I happened to believe that states can do a better job caring
for their own poor, rooting out the fraud and waste and abuse that exists
within their programs.

Current Medicaid Funding Is Provided On An Open-Ended Basis From
The Federal Government. Currently, Medicaid is funded by both the federal government and the
individual states. From CBPP: "Medicaid is jointly financed, with
the federal government generally picking up between 50 percent and 75 percent
of each state's Medicaid costs (57 percent, on average) and the state
responsible for the remainder. Federal Medicaid financing is
open-ended: if state Medicaid expenditures increase, the federal
government shares in the increased costs; if state Medicaid expenditures
decline, the federal government shares in the savings." [Center on Budget and
Policy Priorities, 2/23/11,
emphasis added]

Medicaid Block Grants
Would Cap Federal Funding. From
CBPP: "Under proposals to convert Medicaid to a block grant or otherwise
cap federal funding, the federal government would no longer pay a fixed
percentage of states' Medicaid costs. Instead, it would provide each
state with a fixed dollar amount, with states responsible for all remaining
Medicaid costs. Block-grant proposals vary on how this fixed amount
would be determined, but typically a national Medicaid spending allotment would
be set each year and a formula would determine each state's share of that
allotment...These national or state allotments would be adjusted annually in
order to reflect factors like growth in population, economic growth, or
inflation; based on past block grant proposals, such adjustments likely would
be only partial adjustments." [Center on Budget and Policy Priorities, 2/23/11,
emphasis added]

As a state's block-grant amount became increasingly inadequate
over time, states would likely make up for the shortfall, at least in
part, by exercising the greater flexibility they would be given to restrict
enrollment, eligibility, and benefits. These cuts would likely become deepest
at times when individuals and families most need Medicaid, such as during a
recession.

Such cuts could be devastating for tens of millions of
low-income Medicaid beneficiaries. For example, states might be given
flexibility to cap Medicaid enrollment, leaving uninsured a substantial number
of people whose low incomes would otherwise qualify them for Medicaid. Many current beneficiaries
could also be made ineligible and end up uninsured, as states narrow coverage. [Center
on Budget and Policy Priorities, 1/6/11,
emphasis added, italics original]

Block Grant Financing
Would Also Lead To Reducing Provider Rates. From CBPP: "States facing inadequate block grant
funding would also likely have to further scale back provider rates.
These rate reductions likely would apply not only to hospitals, nursing homes,
physicians, and pharmacies in Medicaid fee-for-service but also to managed care
plans that currently serve low-income children and their parents. That,
in turn, could cause some providers and plans to withdraw from Medicaid,
threatening beneficiaries' access to needed care, particularly in communities -
such as rural areas - that already are underserved. It also would place
greater pressure on providers such as community health care centers and
safety-net hospitals, which rely on Medicaid funding but which would face
increased patient needs because of increases in the numbers of uninsured
individuals if Medicaid enrollment were capped and eligibility restricted under
a block grant." [Center on Budget and Policy Priorities, 2/23/11]

This
Week

CLAIM: Rep.
Ryan Claimed A CBO Study Concludes "The Best Thing You Can Have To Reduce
Income Inequality" Is "More Recessions"

REP. PAUL RYAN: [W]e have to keep
an eye on what is necessary to grow the economy so we can have more broadly
shared prosperity by giving people income mobility, let people rise up. And that
means, take the barriers away from allowing people to rise in society, don't
have a society where we say this is enough, we're going to cap it, and we're
going to try and equalize the differences.

Because what ends up happening, if
you look at that new CBO study that's about income inequality, the best thing
you can have to reduce income inequality is to have more recessions. I mean,
that's basically what their conclusion is. And so you're going to have
different outcomes of different people's lives.

The focus on our government ought
to be to respect people's rights so that they can make the most of their lives.
And the difference in our philosophies is not equalizing the outcome of
people's lives, but giving equal opportunities so people can make the most of
their lives.

FACT: The
CBO Study Notes That Rising Income Inequality Slowed During Recessions But
Points To Different Causes

CBO:
Income Inequality Rose Over 30-Year Period, Except During Recessions. From the
Congressional Budget Office's report, "Trends in the distribution of Household
Income Between 1979 and 2007": "The dispersion of household income rose almost
continually throughout the nearly 30-year period spanning 1979 through 2007
except during the 1990-1991 and 2001 recessions. The recent turmoil in
financial markets, the prolonged recession that began in December 2007, and the
ongoing slow recovery may have caused a pause in that upward trend, but the
present analysis does not extend beyond 2007." [Congressional Budget Office, October
2011]

CBO
Report Measures Change In Income Inequality From 1979 To 2007 Because Those
Years Both Preceded Recessions And Therefore Had "Similar Overall Economic
Activity." From the Congressional Budget Office's report, "Trends in the
distribution of Household Income Between 1979 and 2007": "To assess trends in
the distribution of household income, the Congressional Budget Office (CBO)
examined the span from 1979 to 2007 because those endpoints allow comparisons
between periods of similar overall economic activity (they were both years
before recessions)." [Congressional Budget Office, October
2011]

Despite
Similar Economic Forces In Both Years, Income Inequality Has Risen "Substantially." From the
Congressional Budget Office's report, "Trends in the distribution of Household
Income Between 1979 and 2007": "The distribution of after-tax income (including
government transfer payments) became substantially more unequal from 1979 to
2007 as a result of a rapid rise in income for the highest-income households,
sluggish income growth for the middle 60 percent of the population, and an even
smaller increase in after-tax income for the 20 percent of the population with
the lowest income."

The Congressional
Budget Office also included in its report the following chart showing the share
of after-tax income enjoyed by each quintile in 1979 and in 2007:

CBO:
"Major Reason" For Rising Income Inequality Between 1979 And 2007 Was Wealthier
Households' Share Of Market Income Increased. From the Congressional
Budget Office's report, "Trends in the distribution of Household Income Between
1979 and 2007":

The major
reason for the growing unevenness in the distribution of after-tax income was
an increase in the concentration of market income (income measured before
government transfers and taxes) in favor of higher income households; that is,
such households' share of market income was greater in 2007 than in 1979.
Specifically, over that period, the highest income quintile's share of market
income increased from 50 percent to 60 percent (see Summary Figure 2). The
share of market income for every other quintile declined. (Each quintile contains
one-fifth of the population, ranked by adjusted household income.) In fact, the
distribution of market income became more unequal almost continuously between
1979 and 2007 except during the recessions in 1990-1991 and 2001.
[Congressional Budget Office, October
2011]

CBO:
Change In Market Income Occurred Because Sources Of Income Became More
Concentrated With The Wealthy And Because Capital Gains, Which Are Skewed
Toward The Wealthy, Grew. From the Congressional Budget Office's
report, "Trends in the distribution of Household Income Between 1979 and 2007":

The market
income of households can become more unequally distributed over time if
individual components of income become more highly concentrated or if the composition
of income shifts so that a greater share of total income comes from components
that are more highly concentrated.

Over the
1979-2007 period, the first of those factors was the primary reason overall
market income became less evenly distributed: All major sources of market income became more highly concentrated in
favor of higher-income households. Labor income was the biggest contributor
because it is by far the largest source of income, even though the increase in
the concentration of labor income was smaller than the increase in concentration
for other sources.

A shift in
the composition of income also contributed to the growing concentration. A
decrease in the share of total market income from wages and other labor
compensation and an increase in the
share from capital gains contributed to the increase in market income
inequality because capital gains are much more concentrated among higher-income
households than is labor income. [Congressional Budget Office, October
2011, emphasis added]

Meet
the Press

REP. JOHN
BOEHNER: Well, it's pretty clear that I and our members oppose the Senate
bill. It's only for two months. You know, the president said we
shouldn't go on vacation until we get our work done; and, frankly, House
Republicans agree. We passed a one-year extension of the payroll tax
credit, unemployment insurance with reforms, making sure that those doctors who
treat Medicare patients are not going to see their reimbursements cut. We
had a reasonable, responsible bill that we sent over to the Senate. And,
you know, if you talk to employers, they talk about the uncertainty. How
can you do tax policy for two months?

FACT: Employers Are Worried About Demand, Not "Uncertainty"

WSJ: "The Main Reason" For Hiring Reluctance Is
"Scant Demand, Rather Than Uncertainty Over Government Policies." According
to the Wall Street Journal:

The
main reason U.S. companies are reluctant to step up hiring is scant demand,
rather than uncertainty over government policies, according to a majority of
economists in a new Wall Street Journal survey.

"There is no demand,"
said Paul Ashworth of Capital Economics. "Businesses aren't confident
enough, and the longer this goes on the harder it is to convince them that they
should be."

In the survey, conducted July 8-13 and
released Monday, 53 economists-not all of whom answer every question-were asked
the main reason employers aren't hiring more readily. Of
the 51 who responded to the question, 31 cited lack of demand (65%) and 14
(27%) cited uncertainty about government policy. The
others said hiring overseas was more appealing. [Wall Street Journal, 7/18/11,
emphasis added]

Washington
Post: Executives Can't Draw Specific Link Between
Government Actions And Hiring Decisions. According to the Washington Post:
"Fundamentally, executives objected to Obama's policies on the grounds
they would make the United States a less competitive place to operate in the
long run. But when [manufacturing CEO Jason] Speer and other executives were
pressed on the role that tax and regulatory policies play in hiring, they drew
only vague connections. Speer said his decision
whether to hire is driven primarily by demand for his products. Orders are coming in strong enough that he
is running about 20 hours a week of overtime. So he is weighing whether to hire
two or three additional manufacturing workers. None of the
executives interviewed linked a specific new government initiative with a
specific decision to refrain from hiring." [Washington Post, 8/21/10, emphasis added]

CLAIM: Speaker Boehner Claimed The Keystone Pipeline Would Result
In 20,000 Direct Jobs

REP. JOHN
BOEHNER: That's nonsense. David, it's been going on for three
years. All the studies are done. It's gone through every part of the
regulatory process. The only issue here is that the president doesn't
want to have to make this decision until after his election. Twenty
thousand direct jobs, 100,000 indirect jobs, to build a pipeline from Canada
down to the Gulf that would help our energy security, help produce more energy
here in North America. This is the right thing to do, the American people
support it, and the president shouldn't continue just to put this off for his
own election convenience.

FACT: Pipeline Job Creation
Numbers Are Inflated

Cornell University Global Labor Institute: "Claim That KXL
Will Create 20,000 Direct Construction And Manufacturing Jobs In The US Is
Unsubstantiated" And Has The "Potential To Destroy Jobs." From
a section of a report by Cornell University Global Labor Institute:

The construction of KXL will create far fewer jobs in the US
than its proponents have claimed and may actually destroy more jobs than it
generates.

The industry's
US job claims, and even the State Department's analysis, are linked to a
$7 billion KXL project budget. However, the budget for KXL that will have
a bearing on US jobs figures is dramatically lower-only around $3 to $4
billion.

The claim that
KXL will create 20,000 direct construction and manufacturing jobs in the
US is unsubstantiated. There is strong evidence to suggest that a large
portion of the primary material input for KXL-steel pipe-will not even be
produced in the US

The industry's
job projections fail to consider the large number of jobs that could be
lost by construction of KXL. This includes jobs lost due to consumers in
the Midwest paying 10 to 20 cents more per gallon of gasoline and diesel
fuel. These additional costs ($2 to $4 billion) will suppress other
spending and cost jobs. Furthermore, pipeline spills, pollution and
increased greenhouse gas emissions incur significant human health and
economic costs, thus eliminating jobs.

Put
simply, KXL's
job creation potential is relatively small, and could be
completely outweighed by the project's potential to destroy jobs through
rising fuel costs, spill damage and clean up operations, air pollution and
increased GHG emissions. [Cornell University Global Labor Institute, September 2011]

TransCanada Claimed 13,000
"Shovel-Ready" Jobs Would Result From Keystone Pipeline Legislation. From a 2010 press release from TransCanada:

TransCanada Corporation
(TransCanada) (TSX, NYSE: TRP) today is pleased to announce a Project Labor
Agreement for a significant portion of U.S. construction of the proposed US$7
billion Keystone Gulf Coast Expansion Pipeline Project (Keystone XL). The agreement
will provide TransCanada with a capable, well-trained and ready workforce in
the U.S. to construct Keystone XL. During construction, the project is expected
to create over seven million hours of labor and over 13,000 new jobs for
American workers. [...]

"The proposed Keystone XL pipeline
will have a significant impact on the North American economy through the
thousands of manufacturing and construction jobs it is creating," says
Russ Girling, TransCanada president and chief executive officer. "This project
is entirely paid for with private sector dollars and is shovel ready."
[TransCanada, 9/14/10]

13,000 Jobs Estimate Is "One Person, One Year,"
Meaning Number Of People Employed Over Two-Year Construction Project Would Be
Closer To 6,500 Per Year. From
the Washington Post:

A key question for the
administration is how many jobs the Keystone XL project would create. TransCanada's
initial estimate of 20,000 - which it said includes 13,000 direct construction
jobs and 7,000 jobs among supply manufacturers - has been widely quoted by
lawmakers and presidential candidates.

Girling
said Friday that the 13,000 figure was "one person, one year,"
meaning that if the construction jobs lasted two years, the number of people
employed in each of the two years would be 6,500. That brings the company's
number closer to the State Department's; State says the project would create
5,000 to 6,000 construction jobs, a figure that was calculated by its
contractor Cardno Entrix.

As for the 7,000 indirect supply chain
jobs, the $1.9 billion already spent by TransCanada would reduce the number of
jobs that would be created in the future. The Brixton Group, a firm working
with opponents of the project, has argued that many of the indirect supply jobs
would be outside the United States because about $1.7 billion worth of steel
will be purchased from a Russian-owned mill in Canada. [Washington Post, 11/5/11, emphasis added]

REP. MICHELE
BACHMANN: And remember, the reason why President Obama proposed it in the
first place was to create jobs. There isn't one shred of evidence that
that created jobs. So it defeated its purpose, plus it's put senior
citizens at risk by denying the $111 billion to the Social Security trust fund.

Zandi: "Without That Payroll Tax Cut This Year, I Think
We'd Be Skirting Recession Now." During
a June 26, 2011, appearance on CNN's State
of the Union, Moody's Analytics economist Mark Zandi stated:
"On the other side of that, there are a few things I think that can be
done that would make a difference in the very short term if we need it. So
extending the payroll tax holiday for another year seems like a reasonable
thing to do. I think that can get done politically. Without
that payroll tax cut this year, I think we'd be skirting recession now because
of the higher energy prices." [CNN'sState
of the Union, 6/26/11, emphasis added]

A temporary reduction in
employees' portion of the payroll tax would not immediately affect employers'
costs. Instead, it would have initial effects similar to those of reducing other
taxes for people below the 2010 income cap. The increase in take-home pay would spur additional spending by
the households receiving the higher income, and that higher spending would, in
turn, increase production and employment. Those effects would be spread over time,
however, and the majority of the increased take-home pay would be saved rather
than spent.

CBO estimates that reducing employees'
payroll taxes would raise output cumulatively between 2010 and 2015 by $0.30 to
$0.90 per dollar of total budgetary cost. CBO also estimates that the policy would add 3 to 9 cumulative
years of full-time-equivalent employment in 2010 and 2011 per million
dollars of total budgetary cost. [Elmendorf Testimony, 2/23/10, emphasis added, via CBO.gov]

EPI/Century Foundation: Failure To Extend Payroll Tax Cut
Could Decrease GDP By $128 Billion And Cost Almost 1 Million Jobs. According to an issue brief from the Economic Policy
Institute and The Century Foundation: "As part of December's deal to
extend the Bush-era tax cuts for two years, Congress enacted a 2 percentage
point reduction in the Social Security payroll tax for all workers, and it is
set to expire at the end of the year. The cost of failing to extend the payroll
tax cut is estimated by adjusting the cost of the 2011 payroll tax cut (JCT
2010) by CBO's projection of wage and salary growth (CBO 2011b), resulting in a
cost of $117.8 billion. Applying a fiscal multiplier of 1.09 (Zandi 2010), we estimate that the failure to extend the
payroll tax cut would decrease GDP by $128 billion (-0.8%) and lower nonfarm
employment by 972,000 jobs. [Economic Policy Institute and The Century Foundation, 8/4/11, emphasis added]

Zandi: Extending Payroll Tax Cut Would Create 750,000 Jobs. From McClatchy: "The biggest contributor to job growth
next year under the Obama plan would be extending the payroll tax holiday for
workers, which Zandi estimates would add 750,000 jobs. The portion that is
waved for employers would add another 300,000 jobs, he said. Infrastructure
spending could add 400,000 jobs." [McClatchy, 9/8/11]

To read more about the
payroll tax holiday's effects on the economy, click HERE.

CLAIM: Rep. Bachmann Claimed
Iran Has "Stated Unequivocally" It Would Use A Nuclear Weapon Against Israel
And The United States

REP. MICHELE BACHMANN: I would have every alternative and option on the table because Iran must never
have a nuclear weapon because they have stated unequivocally once they gain a
nuclear weapon, they will use that weapon to wipe Israel off of the map and
they will use it against the United States. As recently as August and
September of this year, the president of Iran again declared that sentiment.

FACT: PolitiFact Rated Bachmann's Claim "False"

PolitiFact: "False" That Iran Has Threatened U.S. Or Israel With Nuclear
Attack. From a PolitiFact analysis of Rep. Michele
Bachmann's statement that Iranian President Mahmoud Ahmadinejad "has said that if he has a nuclear weapon he will use it to wipe
Israel off the face of the Earth. He will use it against the United States of
America":

Iran and Ahmadinejad have maintained that they are not pursuing nuclear
weapons, and that they are only pursuing nuclear energy. [...]

Ahmadinejad has said that he believes the U.S. government orchestrated the
Sept. 11, 2001, terrorist attacks to "reverse the declining American
economy and its grips on the Middle East in order also to save the Zionist
regime." He also has criticized the United States abducting Africans and
turning them into slaves, has said some European countries are still using the
Holocaust to "pay ransom" to Jews living in Israel and said the
United States economy relies on waging wars and selling weapons.

But we're focusing on Bachmann's actual statement during the Nov. 22 debate.
She paraphrased Ahmadinejad as saying, "He has said that if he has a
nuclear weapon he will use it to wipe Israel off the face of the Earth. He will
use it against the United States of America."

Ahmadinejad has said some
tough things about the United States and Israel, but we find no evidence that
he has said he would use a nuclear weapon against either country. In fact, he
has maintained Iran has no interest in building one. We rate this claim False.
[PolitiFact.com, 11/23/11]

Bachmann's assertion is patently
false. Iran has consistently denied that it has a nuclear weapon or is seeking
to build one. Just three weeks ago, ABC's Christiane Amanpour called Bachmann out on
her misstating of the same quote, saying:

AMANPOUR: Congresswoman, of course the United States is concerned
about the nuclear program. Iran denies that it has one, so
it hasn't threatened to use them.